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Falklands oil and gas producer Rockhopper Exploration Plc has announced that its net contingent oil reserves have doubled to more than 300 million barrels, and independent experts are now eyeing this as nearly billion-barrel basin.
Rockhopper owns more than 50 percent of two oilfields, Sea Lion and Isobel Elaine, which are now estimated to hold 747 million barrels of oil and gas reserves, according to the independent audit that was prepared by ERCE.
Rockhopper has a 24 percent interest in the wells, but this will rise to 64 percent once it completes its merger with Falkland Oil & Gas.
Falkland Oil Basins. Image courtesy: Rockhopper Exploration
Last November, Rockhopper agreed to buy Falkland Oil & Gas in an all-share deal that values the explorer at $87 million.
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Argentinian politicians have long promised to throw a spanner in the works. Under British control since 1841, the Falklands Islands, which Argentina calls the Malvinas, have long been in dispute between the two sides.
But there are some indications that Argentina may take a softer stance on this territorial dispute now that a new president is at the helm.
Rockhopper’s takeover of Falkland Oil & Gas was announced within a day of pro-oil Mauricio Macri’s presidential election victory in Argentina, and he has indicated he would adopt a milder attitude with the UK over the Falklands.
His predecessor, former president Cristina Fernandez de Kirchner, had used the Falklands as a campaign tool and had threatened to seize US$156 million in property and bank holdings of oil companies drilling on the islands. Among the targets were Rockhopper and Falkland Oil & Gas.
Foreign Ministry officials in Buenos Aires have said the British energy companies would face prosecution for what they called illegal operations in Argentine territory.
A March ruling by the UN Commission on the Limits of the Continental Shelf could worsen the dispute. The commission expanded Argentinian maritime territory in the South Atlantic Ocean by 35 percent to include the disputed Falkland Islands and beyond.
By Charles Kennedy of Oilprice.com
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Charles is a writer for Oilprice.com